Expat Tax Return Filing Requirements

What are the tax filing requirements for expats?

If you are a U.S. citizen or resident alien and are living overseas, the rules for filing a US income tax return and for paying estimated tax are generally the same as if you were residing within the United States. The filing requirement also applies to estate and gift tax returns for expatriates. These rules apply only to your federal income tax return. Different filing rules apply for each US state.

Your income converted to US dollars, filing status, and age generally determines whether you must file an income tax return. Generally, you must file a return if your gross income (What is gross income?) from worldwide sources is at least the amount shown for your filing status in the following table. If you are self-employed, you have different filing requirements (see here)

Filing Status 2012 2013 2014 2015 2016
Single  9,750 10,000 10,150 10,300 10,350
65 or Older 11,200 11,500 11,700 11,850 11,900
Head of Household 12,500 12,850 13,050 13,250 13,350
65 or Older 13,950 14,350 14,600 14,800 14,900
Qualifying Widow(er) 15,700 16,100 16,350 16,600 16,650
65 or Older 16,850 17,300 17,550 17850 17,900
Married Filing Jointly 19,500 20,000 20,300 20,600 20,700
One Spouse 65 or Older 20,650 21,200 21,500 21,850 21,950
Both Spouses 65 or Older 21,800 22,400 22,700 23,100 23,200
Not Living With Spouse At End Of Year 3,800 3,900 3,950 4,000 4,050
Married Filing Separately 3,800 3,900 3,950 4,000 4,050

Gross income is defined as all the income you receive in the form of money, goods, property, and services that is not exempt from tax.

For Americans living abroad it is important to point out that for the purposes of determining whether you must file a return, gross income includes any income that you can exclude as foreign earned income or as a foreign housing amount.

If I am the dependent of another must I file a tax return?

If you are the dependent of another taxpayer the following rules apply to determine whether you must file a return.

If you are a single dependent you are required to file a return if any of the following items apply:

1.       Your unearned income was more than $2,400 ($3,850 if 65 or older and blind).

2.       Your earned income was more than $7,400 ($8,850 if 65 or older and blind).

3.       Your gross income was more than the larger of— 

a.       $2,400 ($3,850 if 65 or older and blind), or

b.      Your earned income (up to $5,650) plus $1,750 ($3,200 if 65 or older and blind).

If you are a married dependent you are required to file a return if any of the following items apply:

1.       Your gross income was at least $5 and your spouse files a separate return and itemizes deductions.

2.       Your unearned income was more than $2,100 ($3,250 if 65 or older and blind).

3.       Your earned income was more than $7,100 ($8,250 if 65 or older and blind).

4.       Your gross income was more than the larger of—

a.       $2,100 ($3,250 if 65 or older and blind), or

b.      Your earned income (up to $5,650) plus $1,450 ($2,600 if 65 or older and blind).

Do I have to file a return if I am self-employed overseas?

If you are self-employed, your gross income includes the amount on Part I, line 7 of Schedule C (Form 1040), Profit or Loss From Business, or line 1d of Schedule C-EZ (Form 1040), Net Profit From Business.

For self-employed individuals if your net earnings from self-employment are $400 or more, you must file a return even if your gross income is below the amount listed for your filing status in the table shown earlier. Contact us if you need help in determining what your net earnings or gross income amounts are.

When will I be considered age 65 for tax filing purposes?

For tax filing purposes you are considered to be age 65 on the day before your 65th birthday. For example, if your 65th birthday is on January 1, 2017, you are considered 65 for 2016.

Source: www.irs.gov